Freight Futures daily curve: 2/18

Freight Futures data to watch today: National and Regional Forward Curves

The Trucking Freight Futures markets, which are listed on the Nodal Exchange, were closed on Monday in observance of the Presidents’ Day holiday. Accordingly, there were no updates or changes to the settlement prices from Friday.

Given there was no market activity on Monday, a look at the continuous spot prices (FUTC) for the National and Regional Average contracts and comparing them to the futures forward curves (FWD) yields a market expectation for what may happen to rates through the rest of this year and into 1Q 2021. In the National market there was a strengthening of rates through the fourth quarter of 2019 and a big drop to start 2020 (FUTC1.VNU). The National forward curve (FWD.VNU) points to continued softness until early in the second quarter of 2020, when rates begin to rebound. This pattern is similar for both the East region (FUTC1.VEU, FWD.VEU) and West region (FUTC1.VWU, FWD.VWU). The forward curves also are pointing to higher y/y changes in rates in the first half of 2020 and then a mostly flat y/y change in the second half and early 2021. As an example, the March 2019 National contract (FUT.VNU201903) traded at $1.34/mile and the forward curve points to rates around $1.40/mile at the end of March 2020. As for the South region (FUTC1.VSU, FWD.VSU), seasonal strengthening from Valentines Day through the end of June 2020 provides a nice bump in rates and then a flat y/y change develops from July 2020 into first quarter 2021.